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Trying to find financing for your business can be tough in any economic climate. Whether you're looking for start-up funds, capital to expand, or money to hold on through the tough times, the demand for cash is always present and sadly money doesn't grow on trees.

Given our current economy, getting affordable funding is as tough as ever. Below are 10 financing techniques you can use to help and what you should know when considering each.

1. Consider Factoring

Factoring is a finance method where a company sells its receivables at a discount to get cash up-front. This method is often used by companies with poor credit or by businesses such as apparel manufacturers, which have to fill orders long before they get paid. It's also an expensive way to raise funds. Companies selling receivables usually pay a fee that's a percentage of the total amount.

For example, if you pay a 2 percent fee to get a 30-day advance, that's equal to an annual interest rate of about 24 percent. It's that very reason, the factoring business has gotten a bad reputation throughout the years. Still, the economic downturn has forced companies to look for alternative financing methods.

Companies like The Receivables Exchange are trying to make factoring more competitive. The exchange allows companies to offer their receivables to multiple factoring companies at once, in addition to hedge funds, banks, and other finance companies. These lenders will bid on the invoices, which can be sold in as a package or individually.

2. Get a Bank Loan

Lending standards and criteria have gotten much stricter. However, banks like Bank of America and even your local credit union have set aside additional funds for small business lending. With that in mind, there's really no reason you shouldn't apply for a portion of these funds.

3. Use a Credit Card

Using a credit card to fund your business can be incredibly risky. If you fall behind on your payment, your credit score could plummet. However, if used responsibly, a credit card can get you out of a jam and even extend your accounts payable period to assist your cash flow. Many banks and lenders also offer business credit cards tailored to small businesses and their needs.

4. Tap into Your 401(k)

If you're unemployed and thinking about starting your own business, the funds in your 401(k) can look pretty tempting. And thanks to new provisions in the tax code, you actually can tap into them without penalty if you follow the right steps. The steps are simple enough but legally complex, so you'll need someone with experience setting up a C corporation as well as the appropriate retirement plan to roll your retirement assets into. Just remember that if you are considering this as an option, that you're investing your retirement funds. That means if the business fails, not only do you lose your business, but your nest egg, too.

5. Try Crowdfunding

A crowdfunding site like Kickstarter.com and GoFundMe can be an effective way to raise money for a relatively low cost. You'll set a goal for how the money you'd like to raise over a period of time, for example, $2,000 over 30 days. Your friends, family, and strangers then use the site to pledge money. Keep in mind, this isn't about long-term funding. It's supposed to facilitate the asking for and giving of support for ideas in the short-term. Usually, project-creators will offer incentives for pledging. For example, if you give a writer $20, you'll get a book in return. There's no long-term return on investment for supporters. Supporters don't even have the ability to write off donations for tax purposes. Regardless, that hasn't stopped close to 100,000 people from pledging to Kickstarter projects.

6. Attract an Angel Investor

Finding an angel investor can be challenging but can prove to be one of the most successful forms of financing your business. Of course, you have to be willing to part with some of the ownership of your business or the possibility that the investor may want to see returns on their investment in the form of royalties and expensive lines of credit which can be a drain on your cash flow later down the road. Below are some tips on how to handle the angel investor method:

• Add experience to your team: Seeing some gray hair and wrinkles on your management team can help ease investors' fears about your company. The veterans are likely to show your management's ability to deal with a tough economy. Even an unpaid, but highly experienced adviser could add to your credibility.
• Be a leader, not a follower: Did you start your company because you are truly passionate about your idea? Or did you just want to cash in on the latest trend? Angels can spot the difference a mile away and won't likely be interested in companies that stink of a get-rich-quick scheme.
• Know your stuff: Do your homework. This might be the most important thing angel investors will want to see. They are often busy people who want the facts laid out and for them without any additional research on their end. You'll need market assessments, competitive analysis, and solid marketing and sales plans. Even young companies need to demonstrate expert knowledge of the market they are about to enter as well as the discipline to follow through with their game plan.
• Be persistent: An angel may not be interested in your business right from the go. This is often the case if you don't have a track record as a successful entrepreneur. Staying in touch and updating the potential investor on big developments, like a major sale is a great way to keep an angel's interest if your business begins to prove it is a success.

7. Secure an SBA Loan

During economic downturns, banks can be reluctant to take any chances with their own money fearing a credit crisis as we saw in 2008. As a result, loans backed by the U.S. Small Business Administration have become a hot commodity. Of course, funds to support special breaks on fees and guarantees on SBA-backed loans have run out several times. Additionally, SBA-backed loans are open to any small business, but there are a number of qualifications, so be sure to visit their website and make sure your business qualifies for this option.

8. Raise Money from Your Family and Friends

Tapping into your personal network is the most common way to finance a start-up. But remember turning loved ones into creditors can be risky. You're asking to risk their financial future for your goals and can jeopardize your relationship with them if things go south and you cannot repay your debts to them as promised. In all cases where a friend or family member may finance your business, you should treat the situation as if you are approaching an angel investor (see #6 above). Do your research, present them with a clear picture and projection of the business. Make sure all of their questions are addressed and be 100% honest with them. There's no business idea worth being uninvited from Thanksgiving dinner over.

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